DEPARTMENT OF JUSTICE

Drug Enforcement Administration

28 CFR Parts 8 and 9

[Docket No. OAG 127; AG Order No. 3343-2012]

RIN 1105-AA74

Consolidation of Seizure and Forfeiture Regulations

AGENCY: Drug Enforcement Administration, Department of Justice.

ACTION: Final rule.

SUMMARY: Consistent with Executive Order 13563, by this rule the Department of Justice (the Department) revises, consolidates, and updates its regulations regarding the seizure, forfeiture, and remission of assets. The rule recognizes that as of 2002 the Bureau of Alcohol, Tobacco, Firearms, and Explosives (ATF) is now part of the Department, and consolidates the regulations governing the seizure and administrative forfeiture of property by ATF with those of the Drug Enforcement Administration (DEA) and the Federal Bureau of Investigation (FBI). The rule also conforms the seizure and forfeiture regulations of ATF, DEA, FBI, and the Department's Criminal Division to address procedural changes necessitated by the Civil Asset Forfeiture Reform Act (CAFRA) of 2000. The rule allows ATF, DEA, and FBI to publish administrative forfeiture notices on an official Internet government Web site instead of in newspapers. Lastly, the rule updates the regulations to reflect current forfeiture practice and clarifies the existing regulations pertaining to the return of assets to victims through the remission process.

On May 9, 2011, the Department of Justice (the Department) published for public comment proposed regulations implementing the Civil Asset Forfeiture Reform Act of 2000 (CAFRA) (76 FR 26660). Before the comment period closed on July 8, 2011, the Department received comments from only two commenters. The comments and the Department's responses are discussed below in section III.

I. Executive Summary

This rule complies with the requirement under Section 6 of Executive Order 13563 (Jan. 18, 2011) to modify and streamline outmoded and burdensome regulations. First, this final rule recognizes that the Bureau of Alcohol, Tobacco, Firearms, and Explosives (ATF) is now part of the Department of Justice. On November 25, 2002, the President signed into law the Homeland Security Act (HSA) of 2002, Public Law 107-296, 116 Stat. 2135. Section 1111 of the HSA established in the Department of Justice the “Bureau of Alcohol, Tobacco, Firearms, and Explosives” and generally transferred the law enforcement functions, and seizure and forfeiture authority, of the Bureau of Alcohol, Tobacco, and Firearms from the Department of the Treasury to the Department of Justice. This transfer became effective on January 24, 2003. By this rule, the Department consolidates its regulations governing the seizure and administrative forfeiture of property by ATF, DEA, and the FBI. Among other things, this rulemaking identifies the scope of these regulations, updates definitions, identifies the scope of authority available to each of those seizing agencies to seize property for forfeiture, and provides procedures governing practical issues regarding the seizure, custody, inventory, appraisal, settlement, and release of property subject to forfeiture.See§§ 8.1-8.7 of this rule.

Second, the rule conforms the seizure and forfeiture regulations of ATF, DEA, FBI, and the Department's Criminal Division to address procedural changes necessitated by the Civil Asset Forfeiture Reform Act (CAFRA) of 2000, Public Law 106-185, 114 Stat. 202. The rule also incorporates CAFRA's innocent owner defense into the remission regulations. Where CAFRA is silent or ambiguous on a subject relating to administrative forfeiture procedure, the rule interprets CAFRA based on case law and agency expertise and experience.

Third, the rule updates the regulations to conform to other authorities and current forfeiture practice. Thus, § 8.14 adds a provision to the Department's regulations allowing for the pre-forfeiture disposition of seized property when the property is liable to perish, or to waste, or to be greatly reduced in value while being held for forfeiture, or when the expense of holding the property is or will be disproportionate to its value. Section 8.11 clarifies that administrative and criminal judicial forfeiture proceedings are not mutually exclusive, and § 8.16 affirms that the United States is not liable for attorney fees in any administrative forfeiture proceeding. Section 8.23 adds a provision defining the allowable redelegations of authority under the regulations. Section 8.9(a)(1) updates the forfeiture regulations by adding the option of publishing notice for administrative forfeitures on an official government Internet site instead of in a newspaper.

Fourth, the rule amends the list of designated officials at 28 CFR part 9 governing petitions for remission or mitigation of forfeiture, clarifies the existing regulations pertaining to victims, and makes remission available to third parties who reimburse victims under an indemnification agreement.

II. Statement of Need

Consistent with Executive Order 13563, this rule is needed to ensure that the Department's seizure and forfeiture regulations accurately reflect the current composition of the Department, the current state of the law, and current practices and procedures relating to the seizure, forfeiture, and remission of assets. Specifically, the rule is necessary to recognize ATF as part of the Department and to bring clarity to the regulatory framework by consolidating the ATF, DEA, and FBI regulations governing the seizure andadministrative forfeiture of property. The rule is also needed to conform the regulations with the changes to seizure and forfeiture law included in CAFRA, which has rendered many of the existing regulations obsolete. Finally, this rule is necessary to reflect current forfeiture practice and to clarify the existing regulations pertaining to victims and the remission process.

III. DiscussionA. Consolidation of the Regulations Governing the Seizure and Forfeiture of Property by ATF, DEA, and FBI

Consolidating the forfeiture regulations used by ATF (formerly 27 CFR part 72), DEA (21 CFR part 1316, subparts E and F), and FBI (28 CFR part 8 and 21 CFR part 1316, subparts E and F) will achieve greater consistency within the Department and will promote overall fairness by helping ensure that the administrative forfeiture process is governed by uniform procedures.

The final rule removes 21 CFR part 1316, subparts E and F and replaces them by adding an amended 28 CFR part 8 governing the seizure and forfeiture of property by each agency. Part 8 is divided into subparts A, B, and C. Subpart A contains generally applicable provisions for seizures and forfeitures by ATF, DEA, and FBI. Subpart B contains expedited procedures for property seized by DEA and FBI for violations involving personal use quantities of a controlled substance. Subpart C includes the permitted redelegations of authority under these regulations.

However, this consolidation does not constitute the entirety of the Department's forfeiture regulations. ATF continues to enforce and administer the provisions of the National Firearms Act (NFA), ch. 757, 48 Stat. 1236 (1934) (codified at 26 U.S.C. ch. 53). Pursuant to 18 U.S.C. 983(i)(2), Internal Revenue Code forfeitures, including NFA forfeitures, are not subject to CAFRA's procedural requirements. NFA civil forfeiture procedure is governed, for the most part, by the Customs laws (19 U.S.C. 1602-1618), including the notice and cost bond requirements. In addition, pursuant to the Customs laws, the Government's initial burden of proof in an NFA civil forfeiture is to demonstrate probable cause to believe that the property is forfeitable.See19 U.S.C. 1615. Further, there is no innocent ownership defense to forfeiture under the NFA. However, NFA forfeitures are subject to CAFRA's attorney fees requirement.

B. CAFRA Procedural Changes Incorporated in the Final Rule

The rule incorporates CAFRA's modifications to the general rules for civil forfeiture proceedings,see18 U.S.C. 983, by making certain changes to the administrative forfeiture process, including the procedures relating to notice of seizure, filing of claims, hardship requests, and releases of property.

Notice of seizure.Section 983(a)(1) establishes deadlines and procedures for sending personal written notices of seizures to parties with a potential interest in the property. These deadlines and procedures are in addition to, and in some respects different from, the deadlines and procedures under the Customs laws. The forfeiture procedures under Customs laws (19 U.S.C. 1602-1618), which are incorporated by reference “insofar as applicable” in forfeiture statutes enforced by the Department of Justice (e.g.,21 U.S.C. 881(d)), require that “[w]ritten notice of seizure together with information on the applicable procedures shall be sent to each party who appears to have an interest in the seized article.” 19 U.S.C. 1607(a). CAFRA, as codified at 18 U.S.C. 983(a)(1), requires that notice be sent within 60 days of seizure, or within 90 days of a seizure by a state or local agency, or within 60 days of establishing the interested party's identity if it is not known at the time of seizure. CAFRA also provides that a supervisory official of the seizing agency may grant a single 30-day extension if certain conditions are satisfied and that extensions thereafter may only be granted by a court. Section 8.9 of the rule incorporates these notice-related provisions of CAFRA.

Filing of administrative claims.Section 983(a)(2) of title 18 of the United States Code modifies the procedure for filing a claim to seized property and differs in several respects from Customs laws. Under the Customs laws applicable to Department of Justice forfeitures, a claimant to property subject to forfeiture has 20 days after the first published notice of seizure to contest the administrative forfeiture by filing with the seizing agency both a claim and a cost bond for $5,000 or 10 percent of the property's value, whichever is less, but not less than $250.See19 U.S.C. 1608. Section 983(a)(2) eliminates the cost bond requirement for forfeitures covered by CAFRA. Section 983(a)(2) also changes the deadlines for filing claims to contest the forfeiture. Persons not receiving a notice letter must file a claim within 30 days after the date of the final published notice. Those who do receive a personal notice letter may file claims until the deadline provided in the letter, which must be at least 35 days after the date the letter was mailed. Section 983(a)(2) also adds provisions specifying the information required for a valid claim. It reflects the amendments to 18 U.S.C. 983(a)(2)(C)(ii) in the Paul Coverdell National Forensic Sciences Improvement Act of 2000, Public Law 106-561, 114 Stat. 2787, which retroactively deleted CAFRA's original requirements that claimants provide with their claims documentary evidence supporting their interest in the seized property and state that their claims are not frivolous. Consequently, pursuant to section 21 of CAFRA (establishing CAFRA's effective date), the amended section 983(a)(2)(C)(ii) applies to any forfeiture proceeding commenced on or after August 23, 2000. Section 8.10 of the rule incorporates these section 983(a)(2) changes to the claim procedures for an administrative forfeiture.

Release of seized property if forfeiture is not commenced.Section 8.13 of the rule provides procedures to implement 18 U.S.C. 983(a)(3). Section 983(a)(3) requires the release of seized property pursuant to regulations promulgated by the Attorney General and prohibits the United States from pursuing further action for civil forfeiture if the United States does not institute judicial forfeiture proceedings against the property within 90 days after an administrative claim has been filed and no extension of time has been obtained from a court.

Hardship request.Section 8.15 of the rule implements 18 U.S.C. 983(f), which provides procedures and criteria for the release of seized property (subject to certain exceptions) pending the completion of judicial forfeiture proceedings when a claimant's request for such release establishes that continued government custody will cause substantial hardship that outweighs the risk that the property will not remain available for forfeiture.

Forfeitures affected by CAFRA and the final rule.CAFRA's changes apply to civil forfeiture proceedings commenced on or after August 23, 2000, with the exception of civil forfeitures under the following statutes listed in 18 U.S.C. 983(i): The Tariff Act of 1930 or any other provision of law codified in title 19; the Internal Revenue Code of 1986; the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 301et seq.); the Trading with the Enemy Act (50 U.S.C. App. 1et seq.) or the International Emergency Economic Powers Act (50 U.S.C. 1701et seq.); or section 1 of title VI of the Act of June 15, 1917 (22 U.S.C. 401). The final rule similarly applies to all forfeitures administered by the Department with the exception of seizures and forfeitures under the statutes listed in 18 U.S.C. 983(i). The authority of seizing agencies to conduct administrative forfeitures derives from the procedural provisions of the Customs laws where those provisions are incorporated by reference in the substantive forfeiture statutes enforced by the agencies.

C. Changes to the Previous Regulations Governing the Seizure and Forfeiture of Property by ATF, DEA, and FBI

Pre-forfeiture disposition.The provision providing for the pre-forfeiture disposition of seized property, § 8.14, implements the authority of 19 U.S.C. 1612(b), which is one of the procedural Customs statutes incorporated by reference into the forfeiture statutes enforced by the Department. Section 1612(b) authorizes pre-forfeiture disposal of seized property, pursuant to regulations, when the property is liable to perish or to waste, or to be greatly reduced in value during its detention for forfeiture, or when the expense of keeping the property pending forfeiture is or will be disproportionate to the property's value. The rule enables the Department to use the authority of section 1612(b) in appropriate cases.

Internet publication.The rule updates the forfeiture regulations by adding, in § 8.9(a)(1)(ii), a provision for the publication of administrative forfeiture notices on an official government Internet site instead of in newspapers. The statute governing the publication of notice in administrative forfeiture proceedings, 19 U.S.C. 1607, does not require a specific means of publication. Section 8.9(a)(1)(ii) will provide ATF, DEA, and FBI with the choice to use the official Internet government forfeiture site, currentlywww.forfeiture.gov,to publish notice of administrative forfeiture proceedings for no cost as an alternative to the newspaper publication provided for in § 8.9(a)(1)(i). This grant of authority to the agencies parallels a similar grant of authority in Rule G(4)(a)(iv)(C) of the Supplemental Rules for Admiralty or Maritime Claims and Asset Forfeiture Actions.

Pursuant to Rule G(4)(a)(iv)(C), in all civil judicial forfeitures, the Government may give public notice through the Internet rather than in a newspaper. Section 8.9(a)(1)(ii) will permit the Department of Justice agencies to likewise use the official government Web site, currentlywww.forfeiture.gov,to provide notice in administrative forfeitures, a cost savings that is particularly important as the volume of administrative forfeitures is much greater than judicial forfeitures. There is strong statistical proof that Internet access is now available to the vast majority of United States residents. Internet access continues to grow, while newspaper circulation is declining, and in some markets, the option to publish in a traditional newspaper may not be available in the future.

D. Regulations at 28 CFR Part 9 Governing the Remission or Mitigation of Forfeitures

The final rule includes modifications to the regulations governing the remission or mitigation of forfeiture at 28 CFR part 9. Section 9.3(e)(2) is revised by listing DEA's “Forfeiture Counsel” as the pertinent official in DEA forfeiture cases, by deleting references to ATF's “Special Agent in Charge, Asset Forfeiture and Seized Property Branch,” and referring instead to ATF's “Office of Chief Counsel, Forfeiture Counsel,” as the pertinent official in ATF forfeiture cases, and by updating the addresses for both DEA and ATF. Section 9.1 changes the designation of the official within ATF to whom authority to grant remission and mitigation has been delegated.

Second, the definition of “victim” in § 9.2 is modified to make remission available to qualified third parties who reimburse a victim pursuant to an indemnification agreement. In addition, § 9.8 is modified to specify the procedures applicable to persons seeking remission as victims.

E. Summary of the Impact of the Changes on the Public

CAFRA enacted additional due process protections for property owners in federal civil forfeiture proceedings. Section 2(a) of CAFRA, codified at 18 U.S.C. 983, requires prompt notification of administrative forfeiture proceedings. As a general rule, in any administrative forfeiture proceeding under a civil forfeiture statute, the Government must send written notice of the seizure and the Government's intent to forfeit the property to all persons known to the Government who might have an interest in the property within 60 days of a seizure (or 90 days of a seizure made by state or local law enforcement authorities and transferred for federal forfeiture).

CAFRA also changed the procedure for filing administrative claims. Section 983(a)(2)(B) dictates that when the agency both publishes and sends notice of the seizure and its intent to forfeit the property, an owner who receives notice by mail has at least 35 days from the date of mailing, and if the personal notice is sent but not received, an owner has 30 days from the date of final publication of notice of the seizure, to file a claim with the agency. In addition, the notice provision in § 8.9(a)(1)(ii) was updated to allow the agencies to publish administrative forfeiture notices on the Internet instead of in newspapers, consistent with the procedure for civil judicial forfeitures under Rule G(4)(a)(iv)(C).

The filing of a valid claim compels the agency to refer the matter to the U.S. Attorney. To preserve the option to seek civil judicial forfeiture, the U.S. Attorney must do one of the following within 90 days: (1) Commence a civil judicial forfeiture action against the seized property; (2) obtain an indictment alleging the property is subject to criminal forfeiture; (3) obtain a good cause extension of the deadline from the district court; or (4) return the property pending the filing of a complaint. If the Government fails to take any of these steps within the statutory deadline, it must promptly release the property and is barred from taking any further action to civilly forfeit the property in connection with the underlying offense.

Prior to CAFRA, claims in an administrative forfeiture required an accompanying bond of either $5,000 or 10 percent of the value of the seizedproperty, whichever was lower. Section 983(a)(2) eliminated the bond requirement, in forfeitures covered by CAFRA, to give the property owner greater access to federal court. However, to prevent frivolous claims, CAFRA requires the claimant to state the basis for his or her interest in the property in the claim under oath.

Under CAFRA, claimants also have a right to petition for immediate release of seized property on grounds of hardship with a 30-day deadline on judicial resolution of such petitions. Section 983(f)(7) provides that if the court grants a petition, it may also enter any order necessary to ensure that the value of the property is maintained during the pendency of the forfeiture action, including permitting inspection, photographing, and inventory of the property, fixing a bond pursuant to Rule E(5) of the Supplemental Rules for Certain Admiralty or Maritime Claims, or requiring the claimant to obtain or maintain insurance on the property. It also provides that the Government may place a lien or file alis pendenson the property.

It is important to note that CAFRA's deadlines apply only to civil forfeiture actions initiated by commencement of an administrative proceeding under section 983(a) and do not apply to actions commenced solely as civil judicial forfeitures. However, the vast majority of civil forfeitures are handled administratively.

CAFRA changed the procedures for the expedited release of conveyances and property seized for drug offenses to apply only where property is seized for administrative forfeiture involving personal use quantities of a controlled substance.

Although CAFRA enacted a provision granting attorney fees to substantially prevailing parties in civil judicial forfeitures, the regulations make it clear that the United States is not liable for attorney fees or costs in administrative forfeiture proceedings, even if the matter is referred to the U.S. Attorney and the U.S. Attorney declines to initiate a judicial forfeiture on the property.See§ 8.16.

In addition to implementing these CAFRA reforms, the new regulations authorize the destruction, sale, or other disposition of seized property prior to forfeiture whenever it appears that the property is liable to perish or to waste, or to be greatly reduced in value during its detention for forfeiture, or that the expense of keeping the property is or will be disproportionate to its value.See§ 8.14. This disposition must be authorized by the appropriate official of the seizing agency. The regulations also specify that the seizing agency must promptly deposit any seized U.S. currency into the Seized Asset Deposit Fund pending forfeiture.See§ 8.5. There is an exception for currency that must be retained because it has a significant, independent, tangible evidentiary purpose.See§ 8.5(b).

The final rule also changes some of the procedures relating to crime victims in 28 CFR part 9. The definition of victim is modified to make remission available to qualified third parties who reimburse a victim pursuant to an insurance or other indemnification agreement.See§ 9.2(w). In addition, § 9.8 is reorganized and a new paragraph (a) is added to specify the filing procedures applicable to persons seeking remission as victims. Section 9.8(i) clarifies that the amount of compensation available to a particular victim may not exceed the victim's share of the net proceeds of the forfeiture associated with the activity that caused the victim's loss. In other words, a victim is not entitled to full compensation, but only the amount of compensation available from the forfeited property. In addition, the new rule makes the statutory innocent owner provisions at 18 U.S.C. 983(d)(2)(A) and (d)(3)(A) applicable to all owner and lienholder petitions for remission.

IV. Public Comments

The Department received two comments on the rule. One comment was a general statement of support for the rule. The other comment came from a group of four organizations representing numerous American newspapers (collectively, “Newspaper Group”). The Newspaper Group objected to § 8.9 (“Notice of administrative forfeiture”), which consolidates seizure and forfeiture regulations for ATF, DEA, and FBI. Specifically, the Newspaper Group objected to § 8.9(a)(1), which permits the seizing agency to provide public notice of an administrative forfeiture proceeding by publishing notice either on an official government Internet site for at least 30 consecutive days, or once a week for at least three successive weeks in a newspaper of general circulation in the judicial district where the property was seized. The Newspaper Group maintained that “any Internet notice is an inadequate substitute for a printed, fixed newspaper notice” and therefore opposed authorizing agencies to publish notice of administrative forfeiture proceedings on an official government forfeiture Web site as an alternative to traditional newspaper publication.

The Department has reviewed and considered the Newspaper Group's comment and has decided not to make any changes to the proposed rule. The following is a summary of the Newspaper Group's points and the Department's response to each one.

Comment:The overarching theme of the Newspaper Group's comment is that giving the Department the option of publishing notice of administrative forfeiture proceedings on the Internet, as opposed to in newspapers, will disenfranchise property owners, particularly those who the Newspaper Group believes may not have ready Internet access.

Response:The Newspaper Group's comment makes passing mention of the fact that for several years the Department has been using the Internet to afford public notice of “other forfeiture notices from other federal agencies.” This is, however, a point worthy of emphasis at the outset.

Civil judicial forfeitures have been governed, since December 1, 2006, by Rule G of the Supplemental Rule for Admiralty or Maritime Claims and Asset Forfeiture Actions, Federal Rule of Civil Procedure (“Supplemental Rule G”). Since its inception, Supplemental Rule G(4)(A)(iv)(C) has provided two alternative means of affording public notice of civil judicial forfeitures: (1) Publication once a week for three consecutive weeks in a newspaper of general circulation in the district in which the forfeiture action is filed or (2) posting notice of the forfeiture on an official government forfeiture Web site for at least 30 consecutive days. The official government Internet Web site for posting notices of civil judicial forfeitures,www.forfeiture.gov,became operational in December 2007.

In criminal forfeiture cases, post-conviction notices of forfeiture are published according to the provisions of Rule 32.2 of the Federal Rules of Criminal Procedure, in conjunction with section 853(n)(1) of title 21, United States Code. Rule 32.2 was amended effective December 1, 2009, to incorporate by reference the aforementioned notice provisions of Supplemental Rule G.SeeFed. R. Crim. P. 32.2(b)(6)(C). Since then, criminal forfeiture notices also have been posted onwww.forfeiture.gov,thereby providing free public access to notices of all judicial forfeitures, civil and criminal. The success ofwww.forfeiture.govis confirmed by impressive levels of usage; from 2007 to July 2011, 72,007 individuals (based on unique IP addresses) visited the Web site, and the total number of visits was 158,086. For nearly five years, therefore,the Internet has served as an effective and cost-efficient means of providing public notice of thousands of federal civil and criminal judicial forfeiture proceedings.

Comment:The Newspaper Group's comment asserts that “[t]he point of public notice is to put information where people not necessarily looking for it are likely to find it.”

Response:The Supreme Court has held that, in providing public notice of administrative forfeiture proceedings, due process requires only that “the Government's effort be `reasonably calculated' to apprise a party of the pendency of the action.”Dusenberyv.United States,534 U.S. 161, 170 (2002) (quotingMullanev.Central Hanover Bank & Trust Co.,339 U.S. 306, 315 (1950)). AlthoughDusenberyinvolved direct notice of an administrative forfeiture, the same due process standard applies to published notice as well.See, e.g., United Statesv.Young,421 Fed. Appx. 229, 231, 2011 WL 1206664 (3d Cir. Apr. 11, 2011).

The statute governing notices of administrative forfeiture requires only that “notice of the seizure * * * and the intention to forfeit * * * be published for at least three consecutive weeks in such manner as the [Attorney General] may direct.” 19 U.S.C. 1607(a) (incorporated by reference and made applicable to the Attorney General in statutes such as 18 U.S.C. 981(d) and 21 U.S.C. 881(d)). The statute does not require a specific means of publication. The means historically selected by the Attorney General required that notices of administrative forfeiture be published “once a week for at least three successive weeks in a newspaper of general circulation in the judicial district in which the [proceeding] for forfeiture is brought.”See, e.g.,21 CFR 1316.75(a). This was, throughout most of the 20th century, a standard “reasonably calculated” to provide notice to interested parties, notwithstanding the fact that many interested parties might be far removed from the district in question, perhaps even in a foreign nation, and without ready access to American newspapers of general circulation.

The Department believes that in the Internet era, continued adherence to newspaper noticing alone places a burden on persons desirous of receiving notice, including, but certainly not limited to: members of our Armed Forces serving in foreign lands; other persons residing in foreign countries; incarcerated persons or those confined long-term to health care facilities wherever located; or anyone with Internet access but far removed from outlets carrying up-to-date American newspapers of general circulation. By contrast, Internet publication will allow for continuous access to administrative forfeiture notices for at least 30 days on a Web site that may easily be found by, for example, using the term “United States forfeiture” on a search engine. Given the current state of technology, the Department believes that this practice is far more “reasonably calculated” to provide public notice of forfeiture proceedings to all interested persons, whatever their circumstances and wherever they might be located.

Comment:The Newspaper Group's comment assumes that notice of administrative forfeitures will be posted only on the Web site of the law enforcement agency that seized the subject property. Based on this assumption, the comment highlights the alleged deficiencies of using a seizing agency Web site for such purposes, and concludes that “[n]ewspapers are a better choice for public notice given their much broader reach.”

Response:The assumption that the Department will publish notices of administrative forfeiture proceedings on seizing agency Web sites is incorrect. The rule authorizes notice on “an official internet government forfeiture site,” which mirrors the language that authorizes Internet notice under Supplemental Rule G, discussedsupra.As with existing judicial forfeiture notices, administrative forfeiture notices will be posted onwww.forfeiture.gov,the “official internet government forfeiture site” that is dedicated to providing notice of federal forfeiture proceedings. Therefore, the comment's line of argument about the alleged superiority of newspapers over individual seizing agency Web sites is inapposite. Nonetheless, the Department believes the comparative advantages of the Internet as opposed to newspapers in providing public notice of forfeiture proceedings should be addressed more broadly.

The Department, as noted, has had the option of publishing notice of civil judicial forfeitures through the Internet since Supplemental Rule G became effective in 2006. Supplemental Rule G was drafted by the Advisory Committee on Civil Rules (“Committee”), a group composed of federal and state judges, private and government attorneys, and law professors, that is responsible for considering and drafting amendments to the Federal Rules of Civil Procedure, including the Supplemental Rules.1

1The Rules Enabling Act, 28 U.S.C. 2071-2077, authorizes the Supreme Court to prescribe general rules of practice and procedure for the federal courts. Under the Act, the Judicial Conference, a body of federal judges convened by the Chief Justice of the United States pursuant to 28 U.S.C. 331, must appoint a Standing Committee and may appoint advisory committees to recommend new and amended procedural rules.See28 U.S.C. 2073(b). The Advisory Committees currently appointed consist of the Advisory Committees on the Rules of Appellate, Bankruptcy, Civil Procedure, Criminal Procedure, and Evidence. New and amended procedural rules recommended by the Advisory Committees are submitted through the Standing Committee to the United States Supreme Court and then from the Court to the Congress.See28 U.S.C. 2074(a). If the Congress does not act on the proposed procedural rules, they become effective on December 1 of the year in which they were submitted.Id.

The Committee began work on Supplemental Rule G in 2003.2Even then, the limitations of newspaper publication and the promise of Internet publication were readily apparent to the Committee. In the Advisory Committee Note to Rule G, the Committee observed:

Newspaper publication is not a particularly effective means of notice for most potential claimants. Its traditional use is best defended by want of affordable alternatives. Paragraph [(4)(a)](iv)(C) [of Supplemental Rule G] contemplates a government-created internet forfeiture site that would provide a single easily identified means of notice. Such a site would allow much more direct access to notice as to any specific property than publication provides.3

Ultimately, the Committee's proposed version of Supplemental Rule G(4)(a)(iv) authorizing use of the Internet for publishing public notice of civil judicial forfeiture proceedings, and the Advisory Committee Note pertaining thereto, were embodiedverbatimin the official version that was approved by the Supreme Court and the Congress and became effective on December 1, 2006.

In devising Supplemental Rule G, the Committee acknowledged that the Internet, by its nature, offers far greater access to forfeiture notices than newspapers. Once an Internet connection is established, every single user anywhere in the world, at any time of day, has the ability to access federal forfeiture notices online. The same cannot be said of notice published through a single newspaper, the reach of which is limited numerically to the amount of people who read a given edition and geographically by circulation limitations. Indeed, the statistic cited in the Newspaper Group's comment that nearly 100 million adults read a newspaper on an averageweekday is irrelevant for present purposes, as it reflects the total readership of all newspapers combined, which is not the equivalent of 100 million people having access to notices published through a single newspaper.

Supplemental Rule G was also drafted against the backdrop of a dramatic rise in Internet usage coinciding with a precipitous decline in newspaper circulation. Since 2003, these trends have only accelerated. The most recent and comprehensive analysis of Internet penetration isDigital Nation—Expanding Internet Usage,published by the U.S. Department of Commerce, National Telecommunications & Information Administration, in February 2011.4Statistics from this report show that “an estimated 209 million Americans—about 72% of all adults and children aged three years and older—use the internet somewhere, whether at home, the workplace, schools, libraries, or a neighbor's house.”Digital Nationat 28 (emphasis omitted). This represents an increase from 68.4% (197.9 million) in 2009.Id.at 17. Internet use through libraries is particularly important, as it provides the most widespread availability of free and regular Internet access to the general public. The American Library Association's Public Library Funds & Technology Access Study (2010-2011) reports that 99.3% of public libraries offer public access to computers and the Internet.5According to a study by the University of Washington, a third of Americans 14 and older, or about 77 million people, use public library computers.6

6Samantha Becker,et al., Opportunity for All: How the American Public Benefits from Internet Access at U.S. Libraries (Opportunity for All),at 32, available athttp://impact.ischool.washington.edu/documents/OPP4ALL_FinalReport.pdf.

As Internet use has expanded, the circulation of printed newspapers has continued to decline. According toThe State of the News Media 2011,a report issued by the Pew Research Center's Project for Excellence in Journalism, daily circulation of U.S. newspapers has declined 30% in the last 10 years, from 62.3 million in 1990 to 43.4 million in 2010.7This negative trend is reflected by national papers such asUSA Today,which in just the past two years has seen its circulation decline by 460,000, and by big-city metro newspapers such as theNewark Star Ledgerand theSan Francisco Chronicle,each of which lost about a third of its daily circulation over the same period.Id.at 9.

7Pew Research Center,The State of the News Media 2011,at 8, available athttp://stateofthemedia.org/2011/newspapers-essay/data-page-6.

In addition to enhanced accessibility and reach, another factor in favor of publishing forfeiture notices through the Internet is cost. The Advisory Committee that drafted Supplemental Rule G advised in the note pertaining to subpart (4)(a) that, in choosing between newspapers and the Internet as the means for providing public notice, the Government “should choose * * * a method that is reasonably likely to reach potential claimantsat a cost reasonable in the circumstances.”Fed. R. Civ. P. Supp. R. G Advisory Committee's Note (2006) (emphasis added). Currently, according to the Department's Justice Management Division, the Department pays between $10,000 and $12,000 per day in noticing costs to newspapers. Alternatively, publishing those same notices onwww.forfeiture.gov,a fully operational Web site, would be of little to no additional cost to the Government.

Comment:The Newspaper Group's comment predicts that transitioning from newspapers to the Internet as a means of providing public notice of administrative forfeiture proceedings will disenfranchise the following groups: key stakeholders, fractional property stakeholders, the poor, rural residents, minorities, senior citizens, the disabled, and the ill.

Response:The Department is sensitive to this concern but does not agree that using the Internet to provide public notice of administrative forfeiture proceedings will adversely affect these groups.

Before addressing the substance of this particular comment, it is important to note two critical points to place the Department's response in the appropriate context. First, the public notice authorized by § 8.9(a) will be in addition to the personal written direct notice that must be provided, generally by mail, directly to every person known to the Government who appears to have an interest in the property to be forfeited.See§ 8.9(b);see also19 U.S.C. 1607(a). Thus, the relevant category of people in the groups identified in the comment is limited only to those individuals who have an interest in the seized property unknown to the Government, or to those who have an interest known to the Government, but for whom the Government lacks accurate contact information. Only these individuals will have to rely on public notice. All other owners—those with known interests and contact information—will receive personal written notice of the forfeiture proceedings. Second, the proposed regulation affords the Government the option of using the Internet to provide public notice of administrative forfeiture proceedings. If the Government has reason to anticipate that Internet publication may not be effective in a given case, it retains the option of simultaneously publishing notice in a newspaper.

Key stakeholders

Comment:The comment identifies prisoners and frequent travelers as “key stakeholders” whose interests allegedly would not be served by Internet notice, instead of newspaper notice, of administrative forfeiture proceedings.

Response:Like anyone else, prisoners who are known by the Government to have an interest in any seized property are entitled to personal written notice from the Government of any federal forfeiture proceedings against the property. Moreover, if a prisoner's interest in property subject to forfeiture is not known to the Government, there is nothing to guarantee under the current regulations that the prisoner will have access to the few newspapers of general circulation that publish forfeiture notices. The Newspaper Group's comment acknowledges that prisoners lack access to newspapers, but maintains that news of the forfeiture could be provided to them through someone the prisoner knows who sees the notice in a local newspaper. The Department believes that it is unlikely that a significant number of prisoners currently receive forfeiture notices in this fashion, as it would require someone who knows of the prisoner's interest in the property to come across a forfeiture notice of personal property in the correct newspaper of general circulation, to recognize, from both the property description and the date and place of seizure, that the notice pertains to the prisoner's property, and then to convey this information to the prisoner. The Department does not believe that such a scenario will become significantly less likely to transpire if the notice of the forfeiture is published on the Internet.

For similar reasons, the Department does not believe that a traveling property stakeholder will be disadvantaged by this change in noticing practice. The accessibility of general circulation U.S. newspapers is quite limited outside the United States, whereas Internet access to the Federal Government's Internet forfeiture site is readily available in most parts of the world. If the Government is unaware ofa stakeholder's interest in property and thus does not provide personal written notice to the stakeholder, the most likely source for conveying news of the seizure to the stakeholder would be an associate of the stakeholder who knows of both the seizure and the stakeholder's ownership interest. After being alerted of the seizure, it should be easier for the traveling stakeholder to find Internet access than to find and purchase the correct daily issue of a particular U.S. newspaper.

Fractional property stakeholders

Comment:The Newspaper Group's comment asserts that the “rights of a co-owner may not be clear to the seizing agency, and the malfeasance of the property holder may not be clear to minority owners, divorced spouses, unregistered lien holders and others who might not be reached by any personal notice.”

Response:All persons, including fractional property stakeholders, whose interest in seized property is known to the Government, are entitled to personal notice of administrative forfeiture proceedings. In those cases in which a fractional property stakeholder is not known to the Government, the Newspaper Group contends that those individuals are more likely to learn of the forfeiture proceedings through newspaper rather than Internet notice. But even if such a contention could be verified, the Government is not required to provide the most effective notice, only one “reasonably calculated” to apprise a party of the pendency of the action.See Dusenbery,534 U.S. at 170.

The Poor

Comment:The comment maintains that the proposed rule would require property stakeholders to have basic technical skills and access to a costly computer, thus adversely affecting the poor.

Response:As previously noted, Internet access is widely available even for those who do not own a computer. Also, the statistics cited above suggest that finding the right newspaper on the specific dates a particular notice is published may be even more difficult and unlikely to provide greater access to the notice for such property stakeholders, regardless of whether they own a computer or possess the required technical skills. According to a 2010 University of Washington study, those living below the poverty line had the highest use of library computers, with 44% having reported using public library computers for Internet access during the previous year.Opportunity for All, supran.6, at 2. Further, it seems unreasonable to assume that individuals too poor to own a computer will nonetheless have the resources to subscribe to, or purchase at retail, a newspaper of general circulation, such asThe Wall Street Journal,until they obtain an issue containing the forfeiture notice for the property in which they have an interest.

Comment:Newspapers may be written in time-honored basic news language, not legalese.

Response:Forfeiture notices currently posted onwww.forfeiture.govuse the same language as those in newspapers.

Comment:Newspapers “may be written in Spanish or German or Swahili to address a specific non-English-speaking community.”

Response:Non-English newspapers are not newspapers of “general circulation” in the United States and thus cannot be used to publish forfeiture notices.

Rural Areas

Comment:Statistics show that “many rural areas use dial-up connections because broadband is unavailable.”

Response:Dial-up, though it may be slower than other means of connectivity, still provides access to the Internet. Furthermore, theDigital Nationstudy cited previously notes that the “urban-rural gap in Internet use anywhere receded from 4.4 percentage points (69.3% versus 64.9%) in 2009, to 3.6 percentage points (72.4% versus 68.8%) in 2010.”See Digital Nation, supran.4, at 17. There is reason to expect this trend to continue as rural areas lacking “meaningful internet service” should benefit from recent federal initiatives to expand broadband Internet access in rural areas, including over $3.5 billion in awards under the Broadband Initiatives Program (funded by the American Recovery and Reinvestment Act of 2009), as well as ongoing rural broadband loan programs administered by the U.S. Department of Agriculture's Rural Utilities Service.8

Comment:The Newspaper Group asserts that “[s]urvey after survey has shown that particular classes will be disenfranchised if notices are solely placed on internet sites because certain classes are less likely to have access to the internet.”

Response:With respect to minorities, senior citizens, the disabled, and the ill, the same general themes apply: The Internet offers greater accessibility to public administrative forfeiture notices than newspapers of general circulation for such individuals and their associates and thus increases the likelihood that affected individuals in these groups will be notified of a seizure in which they have an interest. While average use of the Internet by these groups may be lower than it is by other groups, it does not follow that they will be “disenfranchised” if administrative forfeiture notices are published only through the Internet, and the comment does not point to information that says otherwise. But even if the Newspaper Group's conclusions could be verified, that would not alter the fact that the Government is not required to provide the most effective notice, only one “reasonably calculated” to apprise a party of the pendency of the action.See Dusenbery,534 U.S. at 170.

Comment:According to the Newspaper Group's comment, “libraries and community centers have limited budgets and can only purchase and maintain a limited number of computers,” and some even have “long lines and limited hours of operation.”

Response:The Department acknowledges that libraries and community centers may have limited resources, but does not believe that the limitations of public Internet access are significant enough to warrant modification to the final rule. As noted previously, 99.3% of public libraries offer public access to computers and the Internet, enabling a large swath of the population to access online forfeiture notices.See Libraries Connect Communities, supran.5, at 3.

Comment:The Newspaper Group's comment claims that government Internet posting of notice does not comport with a “long tradition” that public notice must include four elements: the notice must be published by an independent third party, the publication must be capable of being archived at a reasonable cost, the notice must be accessible, and the notice must be verifiable.

Response:The comment does not reference any statutory or case law to support the proposition that public notice must include these four elements. The Department notes that the applicable requirements for notice are encompassed in the constitutional due process standard governing notice of forfeiture proceedings discussed earlier.

The element referenced in the comment requiring that notice be published by an independent third party presumes that newspapers, being “independent of the government,” provide the public with “an extra layerof confidence in the notice” than if the government published them itself. But this argument mistakes why newspapers were used in the past and the role they serve in the notice process. Newspapers were historically used to provide public notice because, until the Internet, there was no comparable alternative method that was “reasonably calculated” to apprise a party of the pendency of the forfeiture action. It had nothing to do with their status as an “independent and neutral third party.” In fact, for these purposes, there is nothing inherently beneficial about newspapers being independent from the Government given that they merely act as a vehicle for publishing notices prepared and provided by the seizing agencies.

The comment suggests that records of Internet notices of federal forfeiture proceedings will be incomplete or inadequate, citing statistics about backlog and budget issues at the National Archives and Records Administration (“NARA”). The Department does not find this comment persuasive. As an initial matter, the statistics about NARA are irrelevant, as NARA is not charged with preserving forfeiture notices. Furthermore, all information concerning notices posted onwww.forfeiture.govis carefully maintained and archived, enabling the Government to provide appropriate verification of such information to courts as necessary. This verification, in the form of an affidavit to the court verifying the public notice that was given, has proven satisfactory to courts. The Department believes that this method for noticing judicial forfeitures will work as well with respect to public notices of administrative forfeitures posted on the same government Web site. Further, the process of providing legal verification of Internet notice is dramatically streamlined when it is the Government that can retrieve the required data from its own Web site, as opposed to seeking such verification from newspapers. Finally, the Department notes that this regulatory change should correspondingly decrease the burden on newspapers of having to provide such information.

Comment:Many newspapers have adopted a marketing strategy that publishes an issue in print and the identical publication issue is then posted on the newspaper's Internet site on a daily basis. The Government's Internet sites will not be as user-friendly as the newspaper's dual method of print and Internet notification.

Response:The Department does not agree that posting forfeiture notices on newspaper Web sites is superior to posting them onwww.forfeiture.gov.Online posting is not part of the Government's contracts for publication of forfeiture notices, so newspapers are under no obligation to make them freely available to the public online. Moreover, some newspaper Web sites restrict access to the full online version of the newspaper to print subscribers or those who pay for full online access. A potential claimant searching for notice of seized property on such a Web site would either need a subscription to the newspaper that is publishing the forfeiture notice or have to pay a daily access fee. The potential claimant would then have to access the newspaper's Web site, go into the full online edition, search for the forfeiture notice regarding his or her property, and select the exact issue in which the once-a-week notice concerning the property is published. The Department believes it is unrealistic to assume that such a process would provide more effective notice than a freely available Web site dedicated only to forfeiture notices that posts the desired notice, 24 hours a day, for at least 30 consecutive days, in a searchable database.

Comment:The Newspaper Group's comment challenges the Department to support its contention that “internet sites are more cost effective and reach more people.”

Response:The Department believes it has demonstrated above how providing public notice through the Internet can—and indeed already does—reach more people, more easily, and more directly, than newspaper notice. Meanwhile, the cost savings of Internet notice are significant. As noted, the Department currently pays approximately $10,000-$12,000 a day, or between $3.5 and $4.5 million a year, in noticing costs to newspapers. On the other hand, there is very little cost to the Government in adding public notices of administrative forfeiture proceedings towww.forfeiture.gov,an existing and fully operational Web site. Thus, the cost savings to the Government will be what the Department currently pays for publication of such forfeiture notices through newspapers.

Regulatory CertificationsExecutive Order 12866 and Executive Order 13563—Regulatory Planning and Review

This rule complies with the requirement under Section 6 of Executive Order 13563 to modify and streamline outmoded and burdensome regulations. Specifically, in terms of updates, the rule recognizes that as of 2002 the Bureau of Alcohol, Tobacco, Firearms, and Explosives (ATF) became part of the Department, and consolidates the regulations governing the seizure and administrative forfeiture of property by ATF with those of DEA and the FBI. In terms of burden, the rule would add the option of publishing notices for administrative forfeitures on an official government Internet site instead of in a newspaper, potentially saving over $10,000 per day.

Further, this regulation has been drafted and reviewed in accordance with Executive Order 12866, section 1(b), Principles of Regulation. The Department has determined that this rule is a “significant regulatory action” under Executive Order 12866, section 3(f), and accordingly this rule has been reviewed by the Office of Management and Budget (OMB). The costs that this rule imposes (such as additional personnel and higher administrative overhead) fall upon the Department, not upon the general public. The benefits of this rule, however, are numerous. The rule increases the efficiency of forfeitures, requires that the agencies provide prompt due process and notice, requires that property be promptly returned to third parties if appropriate, eliminates the cost bond and its administrative burden, and requires more effective processing and handling of currency. Moreover, providing agencies with the option of publishing administrative forfeiture notices on the Government's dedicated forfeiture Web site will save the $10,000 to $12,000 a day agencies currently spend providing notice through newspapers. Such notice will be available through the Internet at no cost to the general public. For the reasons explained in its response to comments, the Department maintains the benefits of publishing notices on the newspapers in all circumstances, in addition to the Internet, do not justify the costs.

Executive Order 12630, section 2(a)(3) specifically exempts from the definition of “policies that have takings implications” the seizure and forfeiture of property for violations of law. Therefore, no actions were deemed necessary under the provisions of Executive Order 12630.

Executive Order 12988—Civil Justice Reform

This rule meets the applicable standards set forth in sections 3(a) and 3(b)(2) of Executive Order 12988.

Executive Order 13132—Federalism

This rule will not have substantial direct effects on the states, on the relationship between the Federal Government and the states, or on distribution of power and responsibilities among the various levels of government. Therefore, in accordance with Executive Order 13132, it is determined that this rule does not have sufficient federalism implications to warrant the preparation of a Federalism Assessment.

Regulatory Flexibility Act

The Attorney General, in accordance with the Regulatory Flexibility Act (5 U.S.C. 605(b)), has reviewed this regulation, and by approving it certifies that it will not have a significant economic impact on a substantial number of small entities. Some owners of property subject to administrative or judicial forfeiture under laws enforced by ATF, DEA, FBI, and the Department's Criminal Division may be small businesses as defined under the Regulatory Flexibility Act, and under size standards established by the Small Business Administration. Although the regulations affect every administrative forfeiture initiated by ATF, DEA, and FBI, and every remission or mitigation decision by the agencies or the Department's Criminal Division, the rule will not change existing forfeiture laws. It will only revise and consolidate the seizure and forfeiture regulations of ATF, DEA, FBI, and the Criminal Division to conform to CAFRA, and to fill gaps and address ambiguities in CAFRA and other seizure and forfeiture laws. Accordingly, an initial regulatory flexibility analysis is not required.

Small Business Regulatory Enforcement Fairness Act of 1996

This rule is not a major rule as defined by section 251 of the Small Business Regulatory Enforcement Fairness Act of 1996, 5 U.S.C. 804. This rule will not result in an annual effect on the economy of $100,000,000 or more, a major increase in costs or prices, or significant adverse effects on competition, employment, investment, productivity, innovation, or the ability of United States-based enterprises to compete with foreign-based enterprises in domestic and export markets.

Unfunded Mandates Reform Act of 1995

This rule will not result in the expenditure by state, local and tribal governments, in the aggregate, or by the private sector, of $100,000,000 or more in any one year, and it will not significantly or uniquely affect small governments. Therefore, no actions were deemed necessary under the provisions of the Unfunded Mandates Reform Act of 1995, Public Law 104-9, 44 U.S.C. 3518.

Paperwork Reduction Act of 1995

This final rule does not call for a “collection of information” that requires approval by OMB under the Paperwork Reduction Act (PRA), 44 U.S.C. 3501et seq.,because any information collected in connection with forfeiture proceedings would fall within the exceptions to the PRA listed in 44 U.S.C. 3518(c) and 5 CFR 1320.4.

The particular exception that applies to information collected in connection with a forfeiture action depends on the type of forfeiture proceeding that is occurring. Information collected in connection with an administrative forfeiture would fall within the section 3518(c)(1)(B)(ii) exception for the collection of information during an “administrative action * * * involving an agency against specific individuals or entities.”